tv Street Signs CNBC September 24, 2013 2:00pm-3:01pm EDT
winners on the session, teal makers oftentimes applied materials, boeing, office depot and lam, lamb research in a market up to 17 on the dow. that's it for "power lunch." >> "street signs" begins now. >> welcome to "street signs" because we're going to begin with breaking news in yet another outrage among traders. if you're watching this show at this time last wednesday, you know that we brought you the fed's no taper decision right at 2:00 p.m. eastern time. well, once again, a major economic report comes out. once again, there is evidence that there were trades milliseconds before the data was actually released. it's at least the fourth time this has happened this year. eamon javers breaking the story and joins us now. without getting into quantum mechanics can you explain what happened in plain english here. >> here's what we can say.
the federal reserve is contacting certain news organizations to discuss the rules and procedures surrounding the fed's lockup room. that's the area where they release information about the fed's decision to reporters inside the fed headquarters in advance of 2:00 p.m., the hard release time subject to the atomic clock. the subject here is did any reporters transmit any information outside the room about the fed' decision before 2:00 p.m. and the reason they're asking that question, is because of some unusual trading that was spotted by a market analysis firm called nanex. let me bring up some graphics to show you the trades at issue here. first the e-min i futures. it's a graphic on the time line. on the left the blue vertical line is 2:00 exactly. according to nanex the speed of light fastest transmission you can have from d.c. to chicago where this trade igs executed is 7 milliseconds. that yellow line is the 7
millisecond line and what you see in between the blue line and the yellow line is trading in the e-mini futures before that information should have been able to travel from washington, d.c., to chicago, going at the fastest possible tell communications transmission rate relying on the speed of light. the question is how did that information get to chicago to start that explosion of trading. similarly in gold futures we see the same pattern. again the blue line being 2:00 eastern exactly. the yellow line being 7 milliseconds later. that 7 milliseconds line is the fastest possible transmission time to chicago. yet, we see in between those two lines, a pattern of trading, an explosion in gold futures going in just before the 7 millisecond line when everybody else who's waiting for the good old fashioned speed of light to get the information will finally have access to that information in chicago. how did that happen and i can tell you that the federal reserve is contacting certain fuse organizations, they will not tell us which organizations, to discuss the rules and
procedures around ta lockup room on wednesday. >> since we're zeroing in i would like to bring in steve liesman. you were in lockup last wednesday on fed day. walk us through the process here and how something maybe could have happened? >> so, the doors open for the lockup room at 1:30. not closed until a quarter of two and then the doors are closed and you're not allowed to come or go at that point of time. at 10 of they give you a copy of the statement and we are busy how you're going to report the news at 2:00. >> you signed an agreement. >> previously to the disclosing information outside the embargo. two minutes of, television reporters are walked to a location and we are not allowed to say anything but a scripted -- they pick a day of the menu. a day of the week's from the menu and you -- only that as a sound check and that's it. at 2:00 you two. >> let me say two things, i doent believe you did despite what other people -- >> who me? >> it's a joke. in january the natural gas data
come out early and trades from the eia. in june the ism and michigan confidence come out early and be traded on. those are two separate organizations an now the fed. eamon, it's great reporting but fourth early trading leak we've had this year, four separate news organizations or organizations producing data points. it seems clear that it's not a human thing. it's got to be some sort -- it's the method of dissemination that needs to come under fire here because -- >> hedge funds hack four groups simultaneously. >> the question is, how is the information transmitted, when is it traps mitted and there are no human beings involved anywhere in this process in that sub-10 millisecond level. it take yss you 300 milliseconds to blend your high. the black box reads, analyzes the news and executes trades on it in near instantaneous time.
the question is, how did that happen in chicago before 7 milliseconds and that's what we're trying to get an answer to. >> be clear about a couple things. that trade that happened before the yellow line that could have received it, that doesn't prove that they got the information early. it's only evidence of them working on it. >> it's an unusual pattern of trading. >> you wouldn't expect to see any trade there is what you're saying in that period of time. >> because what you see before 2:00, there's radio silence. they're waiting for the fed news clearly to make a decision and it's a directionally correct trade going up which the price does. >> let me move on. my experience as a wire reporter not in my background. how did the wire reporters punch the button. is it -- i know the fed counts it down. there's a clock there. but is the transmission from the wire reporter's computer automated? >> yes. that's going to be one of the questions we have to get an answer to. i believe that it is and that they are told they can release only at a certain time. i know over the department of
labor there was an entire question about the jobs number lockup room and whether the department of labor could actually control the telecommunications cables that went all the way into the computers of the wire service reporters and whether or not they could force the wire service reporters to use laptops provided by the department of -- >> having worked at a company with the wire service for 12 years maybe i can of assistance here. ever see animal house, right? where he partakes of a substance pondering the universe in one fingernail at him. i feel like you need to be there right now. here's my question, which is this. if everything is automated which it is and my computer is synced to release something at 2:00:00:00 repeating p.m. but i have a fractional sinking issue, the atomic clock but talks about nuances of information and time which are already imperceptible to the modern world, if my computer is actually synced for 1:59:59:59 whatever it might be
isn't it possible this is a weird minor computer syncing issue, given we've had it four times with four separate data providers? >> i would defer to technology experts on that question but i think 7 milliseconds is outside the window or 5 milliseconds we see trading is outside the window of clock synchronization issues. we have to look at it and have a technology expert tell us that. what i can tell you is, we -- nanex brought this to our attention. we brought it to the fed's attention. the fed responded and toad us they were going to contact news organizations -- >> one more devil's advocate which is this, this relies on nanex's marking of time the same as the fed's marking of time. that's another issue -- >> that's what i'm trying to get at. >> whether or not their 7 milliseconds off, nane x would mark the trades as happened earlier than the fed would. assuming it was one way or the other. >> we've relied on them a lot in the past on these stories and
haven't had an indication there. you're right. and one of the questions is, what is the fed seeing when it looks at its own tape and ultimately if the s.e.c. looks into this the question would be what kind of data can they get. >> i know we have to wrap. at least one issue which is are we into a realm of quantum time that defies regulation -- >> we've been in the same show, steve. >> i've been to a number of them, brian. >> this is my briain hurts. >> think about what it would take to actually regulate this in the correct way. >> you can't. >> forget regulate it but police it. you get to a police where i don't know that it's possible. >> mandy is a very smart and logical person and she has a great idea, i thought, my god, so freaking practical that it might just work. why not delay trading for one minute after the date ta release. >> defined the end of one minute. >> same problem at the end of that -- same problem at the end of that minute, mandy. >> eamon excellent reporting and
you've raised questions and we need answers from various regulators and technology experts. >> what's the meaning of life, the nearest taco bell. >> let's jump through the whole and try to find out what's down at the bottom there. maybe we'll find answers. thank you very much for joining us. >> you bet. >> steve, thank you as well. >> thank you. >> my pleasure. >> i may be back in ten seconds or i may be here. i'm not sure. >> you've already been here. it's already over, actually. >> or maybe it's just beginning. >> let's get to the markets. my brain -- i need a cocktail. is this a free standing market. much of the gains have been driven by the ned and quantitative easing. the loss from the threat it would end. the gains last week after the fed announcement would keep the spigot open were wiped out by market close yesterday. our question today to you aside from what is the meaning of time is, is the market truly now on its own. that what is lindsay group's peter argues. he joins us now. herb greenberg who was here before he left joins us. peter, before we get into the
topic de jour, get a comment on the previous conversation, if you know, it's so kind of in the weeds. is there malfeasance or weird computer glitch? >> i have to defer. i mean, i find it hard to believe that somehow this information got out beforehand but, you know, with the chart that was just shown it's always possible. i have nothing to say other than that. >> i hope it hasn't been rigged. that would just be one more chink in the chain towards the individual investor feeling this isn't a level of playing field and they'll lose more confidence in the market. which is the topic we've come here to talk about today. you know, you are have a fantastic note saying so much of the year's gains have been driven by the help of qe. let's quantify that, peter. exactly of the, i don't know, 19 to 20% of the s&p has gains so far this year, how many percentage points of that do you think is thanks to the fed? >> well, if you look at it on a dollar basis, i calculate that the increase in market cap in all u.s. stocks is up about $3.7
trillion from january 2nd to today. by next week, or the end of this week when the fed finishes their september buying, qe will total about $765 billion. and the u.s. economy on a nominal basis for the first quarters of the year will grow about $380 billion. as you can see the market cap increase so far exceeds the increase in the economy and the increase in the amount of fed buying. which obviously the gap being a lot of multiple expansion and yes, some profit margin expansion but we've stretched it so far, that the spread between where stocks have been because of qe and the underlying fund mentals are extraordinarily wide right now. >> herb, you're sitting here sort of half grinning, half smirking, all right, because here's the debate. i respect peter immensely. he's a smart guy. we're not exactly on the same page about how much the fed has mattered to the market. my take is this. we've had a hell of a run.
but we've only got bang to where we were pre-crisis. >> which is why no one really knows why -- whether it was qe -- you can throw out anything. i look at it and say what about the short squeezes there especially for the most speculative there. what role does anything play in pushing stocks higher. i have it to tell you something, i had a piece, listen to me -- >> what's the meaning of life, bro. dude, where's my car some. >> and let me explain this to you -- come on. i know where you're going with this i had a speec on the street called, i said this is the greater fool's theory market. cramer came back with something -- >> and crushed you with a smarter -- >> he did not crush me. he called it the -- >> fair debate. i think it was a fair debate. >> smarter fool's theory but that's what happens in a market like this. take a look at this kind of a market peter is right, it is a market every man to himself, every woman to himself in this market. >> which begs the question is this now the market all on its own and to it itself. we've still got the stimulus from the fed. they made that clear last week that they are not going ahead
with tapering just yet, but when indeed, it does happen, because one day it will, peter, what will happen with the market in your theory? >> well, i think when the fed walks away which i don't think they're walking away for a while the market is going to lose its major crutch and it's the bernanke put, a situation of the greenspan put which in addition to the bernanke put is an mark carney put and a draga put. >> we know how this ends, right? we could talk about all the puts in the world? >> you do, it it tell me? >> it doesn't end nicely. >> yes, i agree -- >> no -- >> i agree, but here's the thing, if i had a 401(k) plan and it's up 40% over the last year or two years, do i care why? everyone is like the stock market was up but on extremely long volume. i don't give a whatever. >> if you had a 401(k) that happened to be in fixed income because you lost half your 401(k) in 2001 and 2002 and lost
half again in 2007 and 2008 and on a fixed income you open your statements the last couple months you saw you lost mun cree. >> i agree. >> it's a few percentage points, relative to a potential downside in the stock market doesn't compare, but you lost money. >> the fed has forced people into risk. i agree on that. >> very quickly, why does it have to win badly? why? >> because there's no free lunch. >> okay. >> the fed has pushed this to such an extreme it's impossible it's going to end nicely. >> they might be able to do this in such a way -- >> who's they? let me tell you something people have been squeezed out, every short in the world has been squeezed out, stocks fall in a vacuum, it's happened every time and this time too. people will wake up and say fge, i wish i seen that coming and they did. >> who's they? what's the meaning of time? >> what kind of a show is this. >> what are we doing? >> they is the if ed. when the fed steps away from the market do they have to do it -- >> i put the odds at zero this
ends smoothly. >> let's do a little zen pondering in a corner before we get slapped by the producers. >> on deck, housing stays hot. is it too hot? >> and later on, big sigh, best buy, not just back from the dead but actually kimming it. we're going to dig into the stock's comeback. >> the story behind this amazing crash. they were fine. watch this. they were fine. we'll give you more coming up. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
two big housing headlines today. home builder lennar has a blowout quarter and number two, housing price climb an annualized 12% with price gains in some cities. diana olick has a look at both angles for us. >> stock's of the nation's home builders were higher on strong earnings from lennar and kb home but did have slightly disappointing new orders. take a look, miami based lennar reported q3 earnings up 39%, new orders up 14% annual, little below expectation, deliveries rose 37% to under 5,000 homes. slightly higher cancellation rate, 18% versus 17% a year ago. that may be because of higher mortgage rates playing the average sale price of a lennar home jumped 16% year over year to 291,000. lennar ceo stuart miller said we continue to see long-term fundamental demand in the market driven by the significant
shortfall of new single family and multi family homes built over the last five years. he said to expect some, quote, bumps in the road. you can watch him tonight on "mad money" at 6:00. tight supply is keeping home prices higher but the gains are moderating. prices in the nation's top 10 and 20 cities in july rose 12.3 and 12.4% respectively from a year ago on the case-shiller home price index it. this is a three month running average and go back to prices in may in that reading. all 20 cities, though, positive returns, but 15 out of 20 showed the gains slowing. again. could be due to higher mortgage rates and the fact that huge price gains in some markets were unsustainable. where do we go from here? even the creator of the report isn't quite sure. >> i don't know where home prices are going to go. this might be the beginning of a slow down. it could be the beginning of a bubble, but i don't know. >> bubble, slow down, we will
find out. brian. >> yeah, indeed we will. >> diana, thank you very much. so is it possible the home prices in certain areas have gotten a little too hot to handle. joining us is bob, home building capital product analyst, and ken i want to begin with you, you're sort of a macro existing home sales guy and also perhaps the hottest housing market in the united states where a one bedroom shack is $17 million out in san francisco. what's your take? housing bubble or home prices fundamentally undervalued? >> i would say some markets have seen price increases not sustainable. san francisco is one of them. i think our rate of increase is going to slow dramatically nationwi nationwide, but in markets that have gone up too far too fast. >> a slowing rate of increase is different than a crash. >> that's correct. slowing rate of increase is our forecast. the rate which is 12% nationally goes to 8% year end, and next year in the 4% range.
>> sustainable is the buzz word here then. what do you think, bob? even diana olick was saying the ceo of lennar was talking about a bit of a softness he saw in june, was that a summer swoon or something that is suggesting unsustainability? >> stuart made some very insightful remarks about the health of the housing market today. we have an orderly recovery given the current interest rate outlook. so we see gradual improvement in volumes but with that being said there's a paradigm shift and note, lennar and kb home both showed cra mattic improvement in average selling prices. okay. double digits in both cases. this is sustainable and will continue. these guys have shifted from chasing growth in unit volume, emphasis on driving profitability, the lever you pull on is taking price higher. we're bullish on the pricing as pect. we see room to run. a glide path there for housing prices to continue rising both
for new homes and for resale inventory. >> more of a focus on margins as opposed to growth. what does that mean for their share prices of these home builders like lennar. >> we see disciplined allocation and capital. better behavior from an industry standpoint that's going to lead to expansion down the road. we see near term head winds. the overhang of the fed. at some point it will taper. if you're looking for two to five year returns the home builders are extremely well positioned. if our bullish call on pricing plays out if we expect it. >> i think we learned the people what thought the mortgage rates that would destroy the market have been wrong. is there a level you feel is a level at which it will stop or hurt the housing market, 5%, 6%, 8%? >> ken? >> ken, are you there? >> we might have lost ken. bob, would you like to answer that question. >> our general line, is there a line at which point order growth
starts to recede dramatically and we're going to put out 3.5% on the ten year is our bogey where the red lights will flash. >> yield. >> not mortgage rates. not ten year mortgage. we're past that. >> way past that okay. if we're looking at 350 yield on the ten year, that's the point we think we will have incremental drag, knock a lot more buyers out. >> is that true? when i bought my house i didn't care about the price or the interest rate. i cared about what i could afford on a monthly basis. if interest rates go up, prices may come down so that monthly nut which is how most realtors i talk to say people actually factor in their buying decisions that will become more affordable. >> you're absolutely right in the context people buy a payment and right now, our general view is that the pressure in the buying market is really against first-time home buyers who are stretching to make that payment. but the middle section of the home buyer market the luxury
segment is doing well and lennar and kbh expect that today. we expect those trends to continue. >> is there any possibility that mortgage rates may actually start to come back down again and we've already got the ten year there, below the 2.7 mark and i was talking on futures now, earlier on today with david from new edge and he says there's going to be no taper until next year and at the end of this year he sees the ten year at 2.5 or' ven 2.35, maybe there's hope for someone who hasn't financed. >> i'm not making a call on interest rates but if you think the ten-year yields will go back to 250 and mortgage financing on a 30-year fixed is going to go back to 4.25 that's a bullish tale -- >> i think the wave of refinancing is the biggest concern, everybody will refinance and who will move? >> yeah. >> mortgage of 4% and the next mortgage will be 6 and let's add a room on to the house. that's my longest term fear ins
housing. >> which is good for the building material stocks. >> yeah. >> there's always the silver lining. >> so we like what we saw today from lennar and kbh. terrific quarters, great numbers by both companies and we also continue to have a bullish call on companies like low hawk, for tune brands, strong leverage to increased repair and remodel spending. we expect this to continue in a powerful fashion the rest of the year. >> thank you for joining us. bob. also thanks to ken who unfortunately we lost. quick note, the ceo of lennar is speaking with our own jim cramer, "mad money" 6:00 and 11:00 eastern right here on cnbc. >> all right. next up, we are going streaking in the quad or the trio of old school stock stars. we're kidding. the house that built steve jobs. >> later on, 36 years after the release of the shining, the horror novel gets a sequel. in honor of that, we bring you three red rum stocks. i know what you're thinking...
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it was up earlier on. the dow and s&p were both up and we were looking at maybe the first gain in four days for those two indexes. the nasdaq is kind of the stock performer here, on track for best quarterly gain since the first quarter of last year. >> all right. well looking at longer term trends, we're going to go old school today. i want you to check out these oldies that are absolutely rocking it this month. electric type stuff. safeway is up. up 16% just this month, mandy. what's old is in some ways new again. >> let's go from old school to sort of few school here. why don't we check out yahoo! trading at the highest levels since 2007. that stock up about 58% this year. also really big day for facebookp.
citi upgrading the social network from a buy to a neutral increasing its price target from $55 to 32. remember the ipo price in may of last year, 38 bucks. that stock is up 83% since it came out with its earnings in july, kind of a turning point for the stock and today it is hitting a record since that ipo and, of course, we were just talking earlier on today that last year we did the 2012 stocks draft here on cnbc. you picked best buy up 232% so far tis year. >> you know what, listen -- >> i picked facebook. we were a year early. >> when the stocks draft ended, best buy had gotten back to neutral so if we had gone longer it would have been a nice win. somebody pointed out on twitter the reality if you're early you're not right. at some point, listen, nuances of time movements in stocks. best buy, 234% gain, i'm happy with the pick. >> absolutely. okay. >> he made history in this house
and now steve jobs's childhood home could become a landmark. the historical commission will discuss a proposal to give protected status to the home where jobs and his foster parents moved in 1968. the home where jobs and co-founder steve was knee yak built the first apple computers in their garage in 1976. apple shares because we know nobody cares about them, up a nice 8% thanks to blowout sales of the two new iphones. coming up another boost for the previously mentioned best buy. is this the comeback stock of the year? we've got an analyst who says it's going higher. >> and then later on, it's not quite halloween yet but we have scary stocks. our next guest says you might want to stay far far away from these three names. [ male announcer] surprise -- you're having triplets.
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let's talk street talk. the first game that we have on our list. take a look at what's it's doing. >> it's been a name we've talked about before. it was initiated a new outperform at william blair, outperform who cares. the target 143 bucks, 20% upside to where the stock is now, doubled this year and this at 122 bucks was a $15 stock back in december of 2011. we got to get the ceo on and learn more. >> there, indeed, is the invitation. elizabeth arden, doing up to a buy from a neutral. >> and maybe helping, stock is up 3.8% on a flat market day. sun trust raising their target from 50 to 35, the stock already at 35. stock is up 4% this month. elizabeth arden has had a good run. >> t-mobile. >> tmus is the ticker. the wireless company. initiated, $35 target, 40% upside to the current price.
it's been a hot wireless stock. added 687,000 subscribers, stock up 96% year-to-date. keep your eye. >> to the red hat, red hat is tanking. >> that's ruby tuesday. >> red hat is rht. >> i was wrong and pitched a show, ibm is putting a billion after lennox is that going to benefit red hat. doesn't look like it might. fiscal revenue did top stints but billings were the problem. didn't make estimates there. piper cuts neutral. pacific crest drops their price target to 59, down to 50 bucks. the stock down 7% month to date. >> we're going to be talking more about fries later in the show. in the men time, continental resources, which is a pretty under the radar name today. i don't believe that we've actually had this stock on
"street signs" before. >> i think you're right. it's an oklahoma city based oil and gas company, works in the red river basins among others. goldman sachs initiating continental resource as a buy. target 130shgs the stock at 106, that's 26% upside, the stock is up 45% year to date. >> okay. >> and thus another street talk down the drain. interesting call on best buy. he raised his price target on the stock from 50 to 38. stock at 38.51, had an incredible run this year as mandy referenced in the previous segment, up more than 200% and alan joins us now from barclay's by phone. alan, you know, listen, it's been a great call you've had on best buy. the stock is absolutely soared. my issue, how does it squeeze another 11 and change of upside out of a name that's already up 230% year to date? >> well, first of all, brian, thank you very much for that compliment, but we do think that there's still a lot of life left
in the stock of best buy. in our opinion there's no fewer than half a dozen initiatives going forward which in our opinion is going to continue to boost estimates. in fact, yesterday we just raised our estimate for the fifth time in about eight months to 275 for next year and we think ultimately this company has earnings power north of $3 next year. >> why? why exactly. i see you believe their cost cutting program is not only on track but believe they're going to surpass it. what are you seeing out there that makes you so confident? >> well, mandy, for almost a decade, this company was drunk on growth under the former management team and with a new ceo and cfo in place today, we think there are -- there's newfound focus on controlling the expense structure. we think that there's at least half a billion dollars that can be pulled out of the expense structure in the next 15 months and i had think that number could be north of a billion dollars. the company's ability to do that really can generate some pretty
powerful earnings estimates. every hundred million dollars of expenses that are pulled out, would result in about 21 cents in incremental earnings. the math is powerful for this company. >> what about the show rooming thing? okay. we used to talk about best buy we would always in the same breath say, oh, but it's really suffering from show rooming. has that issue gone away? >> i wouldn't say it's gone away. there's still a consumer perception out there. but best buy has done a terrific job at bringing store in store kiosks which make the company quite unique and something amazon cannot do. we have said the omni channel in my opinion is the best way for any retailer to go forward. the consumer today wants everything and that consumer -- >> they want it now and that's why i've thought show room is a bunch of bologna. people see stuff the price is similar and i want to take it home now. >> that's right, brian. that's why 70% of best buys revenues are initiated on-line where people are using the
on-line to do their research on the products but then they're getting in their car and driving to a best buy which in all likelihood is no more than five miles away interest where they live or work and picking up the product there. >> watching cnbc and "street signs" at 2:00 p.m. eastern and in 77 inch high def and fantastic. thank you very much. >> thank you. >> appreciate it. good call there. >> good call. >> still ahead on "street signs," three scary stocks and three semi scandals. >> and julia boar stein's interview with the ceo of viacom is coming up. talks everything from twitter ads to miley cyrus's vma performance. >> what's coming up in the closing bell? >> he's licking chains, going to lick a chain. >> ride a wrecking ball, bill? >> listen to where i am going, guys. just 91 days to go until christmas. you heard me right. summer ended and we're talking christmas. many retailers are planning to
higher fewer seasonal workers than last year. why that could be a red flag for retail stocks in the economy. content to rent, u.s. home ownership is hitting an 18-year low. former congressman barney frank weighs in on whether we are becoming a nation of renters and whether that's a good thing for the economy or not. overdone the home ownership as part of the american dream thing. all that and more, kelly evans with me today, see you at the top of the hour on "closing bell." i love having a free checked bag
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ceos from the biggest media companies are gathered in manhattan today talking about the future of their business. let's get straight to julia boorstin at the conference who spoke exclusively with viacom's ceo. what did he have to say? >> mandy, viacom's ceo is in a good mood not just because everyone is talking about his mtv network's, but with shares up over 50% over the past 12 months viacom is accelerating its stock buyback optimistic about future rev fews in part because of growth expected from a slew of digital deals with everyone from yahoo! to amazon and now twitter. dohmann says all the new digital
tools aren't distracting from viewers, but are a big win. >> all this technological change is very good for us in particular. because our audiences are living on their devices and they also live watching television. the more opportunities they have to engage, watch, and experience our content in more places, on more devices, the more revenue ultimately we can generate. >> twitter and viacom's a big ad partnership kicked off at the video music awards where milwee's controversial performance set twitter and ratings on fire. >> it was very successful video music awards. we set twitter records thank you, miley cyrus. the video music awards is a signature show for mtv and we put our performers there and wait to see what happens. and it drives the social conversation. we've taught america a few new words they didn't know before
and it's just a lot of fun. >> in terms of the new words i think he was talking about the word twerking. he also hinted at a future gold mine, viacom is currently negotiating to distribute its channels through new digital streaming services from both sony and intel. now, he was very clear there are no plans to split up the bundle. that bundle is very profitable for viacom but he is willing to offer it to those who are willing to pay for the bundle. and as long as they can pay the price, mandy, it's a good deal for viacom. back to you. >> show me the money. thank you very much. >> still ahead on "street signs," review gate, fry gate and wipe gate. three scandalous stories that have the street talking. >> plus -- >> here's johnny. >> momentary lapse of muscular coordination. we're calling them the red rum stocks. names our next guest says you might want to avoid for now.
from the shining. today we find out. steven king is releasing his newest novel dr. sleep. it is a sequel to his 1977 book, the shining. intale, we decided to take a look at maybe stocks that are a little scary themselves. names our next guest says you might want to avoid right now. michael farr, who has never ridden a tricycle down the hallway of a scary hotel. why do you say amazon is a scary stock? >> all work and no play makes jack a dull boy. >> good line. >> i watched the movie, huh? amazon, one of my scariest stocks, 316 bucks, right? up 500% since 2009 on the lows. they've been growing earnings. they've been growing share. but people have been buying it in anticipation of growing profits.
the profits haven't been growing. if these guys disappoint, you know, from 111 times earnings. amazon is 111 times earnings. you disappoint 111 times earnings, see ya. >> you have a thing against these momentum stocks, don't you? amazon is one of them, tesla is another one, netflix is another one. tell us why you don't like tesla. >> you know, i need herb today. tesla, $184.50. it's up 493% in the past 12 months. now, the rule is you buy low, sell high. up 493% ain't low. i don't care how you look at it. market cap of $22 billion. ford has a market cap of $68 billion. so, this company is a third of the size of ford. they've sold 10,500 cars. you know, ford sells millions of cars around the world. trailing 12 months they've got a loss versus ford's sales of --
earnings of $2.8 billion for the past -- come on. this thing is -- >> i want to ask you, have you recently turned negative on these stocks? this there have been a lot of anyw anyway s naysayer on all the three stocks i mentioned. if you had been a nay shortstop sayer on tesla, you would have missed out. >> no question. these things might continue to go up. if the market hits a hiccup and you hit an air pocket, there's no there here. that's what worries a fundamental old guys like me. >> michael, old guys like me, you know, we've seen this before. but amazon -- >> i'd like to be an old gooil guy like you. >> the first cars were electric. >> amazon is one of those great stocks. for some reason -- >> always has been. >> -- it's one that people cut it slack over and over again and you wonder how long they'll do it. the other two, i think, are perhaps -- well, i think they're
all vulnerable but we've said that. look, we talked about amazon being vulnerable in 1999 when it was $80 a share, on its way to $70 a share, $7 a share a few years later and then up to $300 a share. >> i said back then that amazon was too expensive in '99 on the air. when something is too good for too long, something that is up really fast can come down really fast. i have a buggy whip on the desk of my wall -- >> i have a tv career that disproves that theory. >> we have to go. thank you. >> moving on. three headlines -- >> watch it. >> thank you, michael. three headlines that have the street talking today. we're calling them the gate trifecta, skinny fries and flushable wipes. they're all causing a bit of a plumbing fiasco. let's bring in adam and herb
greenberg. let's start with fake online reviewers here. new york state busting firms offering to post fake reviews on sites. what do you make of this? >> i'm sew glad new york is doing something about this. i have three heroine addicts that live on my stoop but this is the real problem. fake reviews. i knew something was up with these reviews. i read a review with laguardia airport and it was described as lovely. >> it was supposed to be love field. you're right. why is new york focusing on this? are we that soft of a country? this is not a four-star yogurt, this is 3 1/2 at best. where's my limo. >> it is a scam. >> you can tell if they're fake. >> you can and determine it. >> see how many view rooe views the potioner has posted, it's glowing and the rest stink,
their uncle owns the restaurant. >> if you take the time to write a yelp review, you have no life. >> our second story, burger king is out with their satisfries, apparently lower calorie fries. they have the same ingredients but the fat is thinner and absorbs less fat. i would just eat more. >> it's a secret formula. the problem is they'll have 20% fewer calories which means burger king customers are going to be 20% less morbidly obese. that's a victory. 800 pound people are going to be 6 680 pounds. >> good math. >> i worked that out ahead of time. >> herb only eats spring onions. would you eat these? >> part of the story -- here's the deal. this is the latest incarnation of new fries. they did new fries in 2011. new fries in 2001. they are -- >> you're going to hit me.
you're getting very angry. >> because they -- >> burger king and mcdonald's duking it out for new fries. wendy's with pretzel double cheese burgers. go with the pretzel double cheeseburger and super big gulp. don't go healthy. >> i agree. now mcdonald's will come out with celery mcnuggets. >> and flushable wipes are apparently plugs up pipes costing some cities millions to repair and no one wants to stick their hand down and pull them out themselves. what do you make of these? >> i'm addicted to these things. they can have my premoistened wipes when they take them from my dead moist butt. >> i've never seen them. >> where, though? >> in your butt. what do you mean where? >> in a supermarket. >> you buy them and take them home and put them on your toilet. >> i thought this was a restaurant story. like my restaurants don't have moistened wipes in the bathroom. where are you eating?
>> they should. >>, no no -- >> i don't leave home without them. >> on that note, adam, great to have on you the show. >> great to be here. >> herb, thank you for coming along as well. >> ass promised, the story behid this insane rally crash. watch this. [ male announcer ] what?! investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you. and all of them offer low cost investments. building animatronics is all about getting things to work together. the timing, the actions, the reactions. everything has to synch up. my expenses are no different. receiptmatch on the business gold rewards card synchronizes your business expenses. just shoot your business card receipts and they're automatically matched up with the charges on your online statement.
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scary video from a rally in netherlands. driver is okay. flipped on over in the water. thanks to the guy that sent it to me. watch the guy with the phone on the left-hand side. go down and help the guy. gee whiz! >> we're only showing it because everyone was okay, nobody was hurt. thanks for watching "street signs." >> "closing bell" is next. >> and we do welcome you to "closing bell." i'm bill griffeth where dow and s&p are trying to snap a three-day losing streak. >> maria about be back tomorrow. lawsuit palooza for jpmorgan. the avalanche of lawsuits for jamie dimon, the stock feeling the pressure today. wh